Monday, March 05, 2012

Health care shopping

Health care is an unusual product in that it is difficult, and sometimes impossible, for the customer to say “no.” In certain cases, the customer is passed out, or otherwise incapable of making decisions about her care, and the decisions are made by providers whose mandate is, correctly, to save lives rather than money.

In other cases, there is more time for loved ones to consider costs, but little emotional space to do so — no one wants to think there was something more they could have done to save their parent or child. It is not like buying a television, where you can easily comparison shop and walk out of the store, and even forgo the purchase if it’s too expensive. And imagine what you would pay for a television if the salesmen at Best Buy knew that you couldn’t leave without making a purchase.

It's true, that this is sometimes the case. Gunshot victims, for example, do not have time to carefully consider the various treatment options available (which is why the purchase of catastrophic insurance is always advisable). But while Klein is technically correct that health care consumers cannot easily comparison shop, as most health care facilities do not post the prices of the different services they offer (because most people pay with insurance, and thus prices are of little relevance), there is no reason why such a model cannot be adopted.

After all, most health care procedures are not of the emergency variety, providing patients with the ability to consult with various service providers. What's to stop someone with a torn ACL with seeking various cost options before undergoing surgery? Or checking the rates charged by different doctors before consulting with someone about why they feel under the weather?

Of course, for any of this to happen a move away from the current insurance-centric approach is required, which is pretty much the opposite of what the Obama administration has opted for through its misguided reform efforts.

Update: Related points on insurance and the lack of health care comparison shopping from Milton Friedman.